Quarterly Update FY17 Fourth Quarter November 9, 2017 1 Johnson - PowerPoint PPT Presentation

Quarterly Update FY17 Fourth Quarter November 9, 2017 1 Johnson Controls plc. – November 9, 2017

Johnson Controls International plc Cautionary Statement Regarding Forward-Looking Statements Johnson Controls International plc has made statements in this communication that are forward-looking and therefore are subject to risks and uncertainties. All statements in this document other than statements of historical fact are, or could be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In this communication, statements regarding Johnson Controls’ future financial position, sales, costs, earnings, cash flows, other measures of results of operations, synergies and integration opportunities, capital expenditures and debt levels are forward-looking statements. Words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “forecast,” “project” or “plan” and terms of similar meaning are also generally intended to identify forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Johnson Controls cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Johnson Controls’ control, that could cause Johnson Controls’ actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: any delay or inability of Johnson Controls to realize the expected benefits and synergies of recent portfolio transactions such as the merger with Tyco and the spin-off of Adient, changes in tax laws, regulations, rates, policies or interpretations, the loss of key senior management, the tax treatment of recent portfolio transactions, significant transaction costs and/or unknown liabilities associated with such transactions, the outcome of actual or potential litigation relating to such transactions, the risk that disruptions from recent transactions will harm Johnson Controls’ business, the strength of the U.S. or other economies, automotive vehicle production levels, mix and schedules, energy and commodity prices, the availability of raw materials and component products, currency exchange rates, and cancellation of or changes to commercial arrangements. A detailed discussion of risks related to Johnson Controls’ business is included in the section entitled “Risk Factors” in Johnson Controls’ Annual Report on Form 10-K for the 2016 fiscal year filed with the SEC on November 23, 2016, and in the quarterly reports on Form 10-Q filed with the SEC after such date, and available at www.sec.gov and www.johnsoncontrols.com under the “Investors” tab. Shareholders, potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this communication are made only as of the date of this document, unless otherwise specified, and, except as required by law, Johnson Controls assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this communication. 2 Johnson Controls plc. – November 9, 2017

Non GAAP Financial Information This presentation contains financial information regarding adjusted earnings per share, which is a non-GAAP performance measure. The adjusting items include mark-to-market for pension and postretirement plans, transaction/integration/separation costs, restructuring and impairment costs, nonrecurring purchase accounting impacts related to the Tyco merger, an unfavorable arbitration award and discrete tax items. Financial information regarding adjusted sales, adjusted organic sales, adjusted segment EBITA, adjusted segment EBITA margin, adjusted corporate expense, adjusted EBIT, free cash flow, adjusted free cash flow, and free cash flow conversion are also presented, which are non-GAAP performance measures. Adjusted segment EBITA excludes special items such as transaction/integration/separation costs and nonrecurring purchase accounting impacts because these costs are not considered to be directly related to the operating performance of its business units. Management believes that, when considered together with unadjusted amounts, these non-GAAP measures are useful to investors in understanding period-over-period operating results and business trends of the Company. Management may also use these metrics as guides in forecasting, budgeting and long- term planning processes and for compensation purposes. These metrics should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Reconciliations of non-GAAP performance measures can be found in the attached footnotes. 3 Johnson Controls plc. – November 9, 2017

Agenda Introduction 1 Antonella Franzen, Vice President, Investor Relations Fourth Quarter Highlights 2 George Oliver, Chairman and Chief Executive Officer Business Results & Financial Review 3 Brian Stief, Executive Vice President and Chief Financial Officer 2018 Guidance 4 George Oliver, Chairman and Chief Executive Officer Q&A 5 4 4 Johnson Controls plc. – November 9, 2017 Johnson Controls plc. – November 9, 2017

A Year in Review What Went Well What Needs to Improve  Organic growth and orders in  Significant progress related to merger Buildings integration - Reorganization complete  Gross margins in Buildings - Merger / Productivity cost savings  Free cash flow conversion  EBIT margin expansion of 90 bps  Completed Adient spin-off and sale of  Consistently delivering on our Scott Safety commitments  Opportunistic share repurchases - ~$650M of buybacks 5 Johnson Controls plc. – November 9, 2017

What Is Changing As We Move Forward  Senior leadership team fully aligned to driving execution  Compensation incentives directly linked to organic sales growth, EBIT growth, and free cash flow conversion  Increasing sales capacity and execution  Establishment of cash management office to drive free cash flow conversion  Disciplined capital allocation with continued opportunistic share repurchases  Ongoing review of portfolio / non-core divestitures  Setting grounded expectations  Lead with clarity, simplicity, and confidence Creating Long-term Shareholder Value At The Forefront Of All We Do 6 Johnson Controls plc. – November 9, 2017

FY17 Fourth Quarter Earnings from Continuing Operations* NET SALES DILUTED EPS $0.87 $8.1 B $7.8 B +4% $0.76 Reported +14% +2% Organic FY17 Q4 FY16 Q4 FY17 Q4 FY16 Q4 COMBINED COMBINED EBIT EBIT Margin $1,131 M +10% +80bps $1,025 M Reported Reported +10% +110bps Excluding FX Excluding FX and Lead and Lead FY17 Q4 FY16 Q4 COMBINED *Non-GAAP excludes special items. 2016 results combine legacy Johnson Controls and legacy Tyco adjusted results. See footnotes for reconciliation. 7 Johnson Controls plc. – November 9, 2017

FY17 Q4 Results vs. Prior Year* EPS BRIDGE $0.02 $0.87 $0.01 $0.09 $0.76 ($0.01) F Y 1 6 S Y N E R G I E S & V O L U M E / T A X I N V E S T M E N T S F Y 1 7 Q 4 P R O D U C T I V I T Y M I X R A T E Q 4 C O M B I N E D * A C T U A L * EPS* Growth of 14% year-over-year *Non-GAAP excludes special items. 2016 results combine legacy Johnson Controls and legacy Tyco adjusted results. See footnotes for reconciliation. 8 Johnson Controls plc. – November 9, 2017

Integration Update  Solid progress in quarter with cost synergies / productivity savings; high-end of range for the year  Expect continued benefits; incremental synergy / productivity savings of $250 million in FY18 FY17 Synergies/Productivity Grow, Integrate, Q1 Q2 Q3 Q4 FY17 FY17 FY17 FY17 FY17 Change, Operate ~$0.05 ~$0.06 ~$0.07 ~$0.09 ~$0.27 9 Johnson Controls plc. – November 9, 2017

Building Technologies & Solutions Segment Structure  Controls  Fire Detection Building Global  Security Solutions Products Field / Direct Channel Indirect Channel ~$15B ~$8B Building Europe Management FY17 Sales FY17 Sales HVAC/R ME& Equipment Africa Latin  Chillers America  Unitary  Hitachi  HVAC Products  Industrial Refrigeration $23B  Marine Specialty Products  Scott Safety  Fire Suppression HVAC & Controls* Fire & Security *Includes performance contracting. 10 10 Johnson Controls plc. – November 9, 2017 Johnson Controls plc. – November 9, 2017

Building Technologies & Solutions* Strong Margin Expansion  Organic sales growth +1% NET SALES  $6.0B Building Solutions down 1% $6.0B (1)% - North America down low-single digits - EMEA /LA up low-single digits Reported - Asia Pacific flat  Global Products +3% +1% - Building Management up low single digits - HVAC & Refrigeration Equipment up low-single digits Organic - Specialty Products up low-single digits FY17 Q4 FY16 Q4 COMBINED SEGMENT EBITA Segment EBITA margin +80bps  $904 M  Productivity savings and cost synergies +5% $863 M  Price cost pressure Reported  Product and channel investments +5% Excluding FX FY17 Q4 FY16 Q4 COMBINED *Non-GAAP excludes special items. 2016 results combine legacy Johnson Controls and legacy Tyco adjusted results. See footnotes for reconciliation. 11 Johnson Controls plc. – November 9, 2017